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What To Look For In A Rewards Credit Card

This post is in partnership with Deserve. Thank you for supporting brands who support TCM!

Rewards credit cards.

You’ve probably heard about them before, in fact you may have even read my post on why you need a rewards credit card. Basically they allow you to earn rewards for your spending. But often times it’s hard to know which type is right for you – or if there are even any available to you based on your credit score! So today let’s tackle what to look for in a rewards credit card so you can start getting something back for all that hard earned money you’re spending!

First things first, what credit score do you need to qualify for a rewards credit card?

Every rewards card is going to have a different requirement, so always make sure you read the fine print before applying! According to NerdWallet, typically you’ll need to be at least in the “good range” in order to qualify for a rewards card. Meaning a credit score no lower than 690 to start enjoying the perks.

My friends atDeserve are focused on helping millennials and Gen Z gain financial independence through access to fair credit products. Where traditional lenders see risk, Deserve sees potential. They offer everything from student credit cards (Deserve Edu available to those in the “average” range at 650 or higher to be exact), and their Deserve Pro rewards card is available to those with a 700 score or higher.

Remember though, hold off on applying for a rewards credit card until you know you can meet the minimum credit score requirements, otherwise that’ll count as a hard inquiry and drop your score a little lower without any actual gain.

What types of rewards credit cards are out there?

General reward points:

Basically you accumulate points that can be traded into the cards marketplace either for credit or goods. Each cards marketplace will vary, but typically you’ll see options to apply the points to your credit card bill, trade them in for gift cards, or an actual item like a watch.

Co-branded cards:

This is when a big brand, co-creates a card with a credit card company. You typically see this with hotels, airlines, retail stores, and gas. Basically if you’re a brand loyalist it’s great since you’ll be getting extra perks at that specific place.

General gas or airline cards:

Okay, I know I just listed gas and airline cards in the previous co-branded card section, but sometimes these cards aren’t branded to a specific chain, and you can earn points or rebates when you use them at any place in their respective categories. Meaning if you have a general airline card, you can earn points on any airline, or a general gas card will earn points at any gas station.

Cash Back:

Exactly what it sounds, cash back for your purchases. Typically, these cards allow you to earn 1% back on your purchases.

Okay, great to know what’s out there but…

What should I look for when choosing a rewards credit card?!?

Annual Fee:

Most rewards credit cards are going to charge you anywhere from $0-500! So always make sure you know what you’re signing up for in advance! If a card has an annual fee, you’ll want to make sure the rewards you’re earning will surpass the fee!

Redemption Threshold:

Always, always, always read the fine print! It’s SO important to know what you’re getting yourself into! Seriously, credit cards and bank accounts are only “hard” if you’re not sure what you’re signing up for.

A lot of rewards cards will require you to meet a certain threshold before you can actually get the reward! So for instance, say you have a card that requires you to earn 200,000 points before you can trade it in, but you won’t see anything until then! That’s SUPER annoying, and if you’re having to pay an annual fee on top of that, the card may end up costing you more! So before signing up, make sure the threshold is something easy to reach, like Deserve Pro’s, which gives you the cash back as a credit to your statement in $25 increments. Easy peasy.

Type of reward:

Alright, so above I broke down the types of reward cards you’ll come in contact with. Now it’s time to think about your spending.

Personally, I’ve never cared for co-branded cards because I’m not a brand loyalist. I go wherever the deal is. In addition, I’ve had credit cards that use general points, but I always find that “trading in the points” process to be annoying or that the value of my points is so much LESS than I’d like it to be. For instance, 10,000 points equals a $25 gift card?!? No thank you! And then I find myself racing the clock to use the dang points before they expire!

Which leads me to cold hard cash back! Something to note: cash back is typically a credit applied to your statement, not a deposit in your checking account. BUT, even with that said, it’s still cash back in the sense you aren’t taking that money out of your accounts and it’s free to be invested or even put in a high yield savings account where it’s working for you rather than “The Man, ” or being tied up in depleting points, ugh.

If I’m not into investing or moving money into my high yield savings account, it’s still a win since I’ll be able to spend more on the credit card (because we only charge what we can pay off that month people! #adulting), and in turn earn more cash back!

Another reason I love Deserve: unlike most cash back cards who only give you 1% back on all qualifying purchases, Deserve Pro uses a 3-2-1 cash back model.

Deserve Pro Mastercard 3-2-1 Benefits:

They offer 3% cash back on travel and entertainment. Yes, that’ll include your Uber and Lyft rides – like I said they’re millennial friendly, and a lot of other credit card companies only include airlines and rental cars in their “travel” category. Also in line with understanding millennials, entertainment includes your Netflix subscription, Live Nation purchases, and movie tickets.

They offer 2% cash back on restaurants. Taco tuesdays never tasted so good!

Remember, credit cards are not something to be feared. They are a tool that can work in your favor, as long as you’re clear on what you’re signing up. Only charge what you can pay off each month, and make sure you aren’t leaving money on the table by switching to a rewards card!

Grab TCM’s checklist for saving on a budget!

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I'm Rachel, the founder of The Confused Millennial, a lifestyle blog sharing personal experience and advice to help other confused millennials navigate this whole "#adulting" thing on topics like careers, entrepreneurship, finance, the home, relationships and more.
After earning my Master's Degree in Counseling, and landing my "dream job" I found myself feeling completely miserable with no work-life balance. I rectified the situation by getting in touch with my passions and started coaching millennials to create their own blog or business that they could turn into a fulfilling and sustainable career. My expertise has been seen on Forbes as a contributing writer, Fast Company, Brit + Co, Dailyworth, and more. Learn more about working together on turning your blog into a business here.

About Me

Hi there! I'm Rachel, the founder of #TCMillennial. I am a multi-passionate millennial who loves helping others embrace who they truly are while figuring out this whole "adult" thing. On the blog, you'll find all things #adulting like: real talk, tips for professional development, and so much more! If you want to write a guest post or request a topic, get in touch!